Let’s be honest.

The construction market is not great right now.

The business reports echo the sentiment. The workers in the field do as well.

“The construction industry is still trying to come out of our lowest market since the early 1980s,” says Bob Barker, executive vice president of the Associated General Contractors (AGC) of Wisconsin.
Ninety-five percent of AGC members work primarily as commercial, industrial and institutional contractors. They work in the public sector on projects such as schools, universities and government buildings. Barker explains that most jobs, however, are heavily rooted in the private sector.

In comparison to surrounding states and even nationwide, the “Wisconsin construction job market has been hit particularly hard,” he says.

A trend has begun among construction workers who follow jobs to locations quite some distance from home. They are traveling to other states more than ever in search of work, and also following clients out of state. Others are leaving the profession altogether.

“If you are a skilled tradesman and have a family to feed, you’re either going to stay in your trade and work, or find work in another industry,” Barker notes.”Or if you’re close to retirement, you’re going to retire. I think there’s a mixture of reactions to the unemployment situation in our industry.”

The Present Situation

The Wisconsin Department of Revenue’s Department of Research and Policy reports the construction sector peaking in early 2006 with 129,700 jobs. In April 2011, it hit a new low at only 86,700 opportunities available for workers.

In the last five years, one out of three construction workers have lost their job. From April 2010 alone, the economy has seen an 11 percent decline.

Wisconsin ranks 49th nationwide in regards to construction job numbers.

“So it hasn’t been, and it’s not, a pretty picture,” says Barker.  “But, I’m not sure we’ve really bottomed out yet.”

This natural optimist was hoping 2011 would be the year the construction economy would turn around, but so far that’s not the case. He suspects the long, wet spring contributed to the current climate, as well as economic factors.

Many companies are not moving to Wisconsin and current businesses are not expanding in state either. “I think these companies are moving to more business-friendly environments,” Barker explains.

He said that even though it’s documented that corporations have cash to spend on their balance sheets, “they are waiting to see what happens with the economy before investing in people and facilities. The stock market and other economic indicators are so volatile, I just don’t know that there’s any clear direction on where things are going.”

The Future Outlook

The Department of Revenue is estimating two more years of job losses.

Barker says the same. “We anticipate that 2011 is going to be a difficult year and we don’t know that 2012 is going to be much better,” he notes.

Estimates show a 5.8 percent decline of employment in 2011 and one percent in 2012, with recovery in 2013 and 2014 of nearly eight percent over the two-year period. 

The bright spots Barker says are in the light industrial/manufacturing and health care sectors.

He says that many contractors are hanging on by a thread, hoping to ride out this wave of economic turbulence and make it through to the other side.

“Without a drastic turnaround in the market soon, we could see some more companies go out of business,” says Barker.

Part of this turnaround, he explains, needs to begin with the credit market and banking industry. He understands the banks are on edge because of federal regulations.

However, Barker stresses, “there’s cash sitting on the sidelines not being introduced into the markets. We need the banking industry to figure out how to appropriately loan money for projects.”

The Wisconsin construction industry is bracing itself for another two rocky years and praying 2013 proves to be the turnaround it’s hoping for.

By Jen Bradley

Jen Bradley is a freelance writer living in East Troy.

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